HF 1319

as introduced - 87th Legislature (2011 - 2012) Posted on 03/28/2011 09:51am

A bill for an act
relating to taxation; providing a Minnesota housing tax credit; proposing coding
for new law in Minnesota Statutes, chapter 290.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [290.0682] HOUSING TAX CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms
have the meanings given, unless the context clearly requires otherwise.
new text end

new text begin (b) "Agency" means the Minnesota Housing Finance Agency.
new text end

new text begin (c) "Compliance agreement" means an agreement:
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new text begin (1) between the owner of a qualified Minnesota project and the agency or
suballocator;
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new text begin (2) that is recorded as an affordable housing restriction on the real property on which
the qualified Minnesota project is located; and
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new text begin (3) that requires the project to be operated in accordance with the requirements
of this section for the compliance period.
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new text begin The agreement may be subordinated to the lien of a bank or other institutional
lender providing financing to the qualified Minnesota project upon the request of the
bank or lender.
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new text begin (d) "Compliance period" means the period of time as determined by the agency for
which a project is subject to a compliance agreement between the owner of a qualified
Minnesota project and the agency or suballocator beginning with the first taxable year a
credit is claimed under this section.
new text end

new text begin (e) "Eligibility statement" means a statement authorized and issued by the agency
or suballocator certifying that a project is a qualified Minnesota project. The eligibility
statement must specify the maximum annual amount of the credit authorized for the
project.
new text end

new text begin (f) "Federal Low-Income Housing Tax Credit" means the federal tax credit provided
in section 42 of the Internal Revenue Code.
new text end

new text begin (g) "Qualified Minnesota project" means a rental housing project that is located in
Minnesota and meets the following requirements:
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new text begin (1)(i) has been allocated federal low-income housing tax credits by the agency
or a suballocator; or
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new text begin (ii) is a housing project that has received a funding commitment from the agency
under the economic development and housing challenge program under section 462A.33;
and
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new text begin (2) the owner of the rental housing project enters into a compliance agreement with
the agency or the suballocator that is enforceable by state and local agencies.
new text end

new text begin (h) "Suballocator" means an allocator, other than the agency, of low-income federal
housing credits and credits under this section as provided in section 462A.222.
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new text begin (i) "Taxpayer" means a person, firm, partnership, or other entity subject to the
individual income tax or corporate franchise tax under this chapter or to the insurance
gross premiums tax under chapter 297I.
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new text begin (j) Terms not otherwise defined in this subdivision have the meanings provided in
section 42 of the Internal Revenue Code.
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new text begin Subd. 2. new text end

new text begin Minnesota housing tax credit; allocation. new text end

new text begin (a) The agency and all
suballocators may allocate credits annually for a five-year period beginning January 1,
2012. The total amount of credits that may be allocated each year is the sum of:
new text end

new text begin (1) $.......;
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new text begin (2) any unused Minnesota housing tax credits, if any, for the preceding calendar
years; and
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new text begin (3) any Minnesota housing tax credits returned to the agency or a suballocator
by a qualified Minnesota project.
new text end

new text begin (b) Unless otherwise provided in this section, the agency shall authorize, administer,
and determine eligibility for the credit under this section, in accordance with criteria used
in awarding federal low-income housing credits and in making funding commitments
under the economic development and housing challenge program in section 462A.33.
new text end

new text begin (c) The agency must allocate credits to suballocators under this section in the manner
and in the respective amounts provided in section 462A.222.
new text end

new text begin (d) The agency and suballocators may only allocate tax credits to owners of qualified
Minnesota projects that are placed in service on or after January 1, 2012.
new text end

new text begin Subd. 3. new text end

new text begin Credit allowed; limitations; transfer. new text end

new text begin (a) A taxpayer who holds a credit
under subdivision 2 may claim the Minnesota housing tax credit against the taxes imposed
under this chapter and chapter 297I. The taxpayer may claim the amount allocated in the
year in which the credit is allocated and in each of the four following taxable years.
new text end

new text begin (b) A credit allowed under this section may not exceed liability for tax under this
chapter and chapter 297I.
new text end

new text begin (c) If the amount of the credit under this section exceeds the limitation under
paragraph (b), the excess shall be a Minnesota housing tax credit carryover to each of the
five succeeding taxable years. The entire amount of the excess unused credit for the
taxable year must be carried first to the earliest of the taxable years to which the credit
may be carried and then to each successive year to which the credit may be carried.
new text end

new text begin (d) All or any portion of tax credits issued under this section may be transferred,
sold, or assigned to one or more entities without regard to ownership in the qualified
Minnesota project and without regard to any other allocation of credits, depreciation,
profits, or losses under the entities' organizational documents. All or any portion of the
tax credits issued under this section may be further transferred, sold, or assigned to one
or more entities without transferring any ownership interest in the qualified Minnesota
project or any interest in the entity owning the project. The transferor and transferee of
tax credits must notify the Department of Revenue of the transfer in a form and manner
as specified by the commissioner. The transfer is for credits attributable to periods after
the transfer date, and may not include carryforward of prior year credits. A partial year
shall be allocated on a daily basis.
new text end

new text begin (e) An owner of a qualified Minnesota project must certify to the commissioner
the amount of credit allocated to each entity and provide the commissioner with other
information required by the commissioner to determine the allocation of the credit.
The owner of a qualified Minnesota project eligible for the credit must submit to the
Department of Revenue a copy of the eligibility statement issued by the agency or
suballocator with respect to the qualified Minnesota project and a copy of the project
owner's tax return that must be filed as required under chapter 289A. If the owner fails to
attach the eligibility statement, a credit is not allowed for that project for that taxable year
until the copy is provided to the commissioner.
new text end

new text begin Subd. 4. new text end

new text begin Credit duration. new text end

new text begin Except for unused credits carried forward under this
section, a taxpayer is eligible for the Minnesota housing tax credit for a project for no
more than five taxable years.
new text end

new text begin Subd. 5. new text end

new text begin Education; promotion; enhancement. new text end

new text begin (a) The agency, in cooperation
with the suballocators, shall conduct periodic educational seminars and promotional
events to inform potentially interested purchasers of the state credit and shall facilitate
and encourage creation of state credit buyer pools to acquire federal and state credits
in Minnesota.
new text end

new text begin (b) The agency, in collaboration with the suballocators, may pursue methods of
enhancing the efficiency of the Minnesota housing tax credit program, including pursuing
opinions from the Internal Revenue Service in the form of general counsel memoranda,
private letter rulings and other notices, rulings, or guidelines to enhance the value of the
credits; by reviewing other state housing tax programs that utilize an option for taxpayers
to receive the tax credits in the form of a loan generated by transferring the credit to a
designated state entity; and any other methods.
new text end

new text begin (c) Not later than January 15, 2016, the agency shall submit a written report to the
chairs and ranking minority members of the committees of the legislature with jurisdiction
over taxes, in compliance with sections 3.195 and 3.197, on the success and efficiency of
the Minnesota housing tax credit program. The report must include recommendations for
the enhancement or modification of the program.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
with credit authorizations allowed for taxable years beginning after December 31, 2011.
new text end